THE LEGALZOOM QUESTION: SHOULD YOU HIRE A BUSINESS ATTORNEY OR DO IT YOURSELF
April 11, 2013
By James Forrest
At the Forrest Firm, one of our core practice areas is that of corporate transactional law, which often includes assisting companies with formation of their entities. In the age of LegalZoom and other do-it-yourself, internet-based legal document and filing providers, we often face this question: “Why should I hire an attorney to help me start my business instead of doing it myself through something like LegalZoom?”
The premise of this question undoubtedly comes from clients desiring pricing certainty, and past experience or knowledge leads them to believe that having a real live lawyer involved will be expensive and the price for services will be difficult to estimate/budget. At some level, our firm applauds LZ in their efforts to streamline legal services and ultimately make them more efficient and affordable for clients (we discuss predictability of pricing here: https://forrestfirm.com/2011/05/core-values-of-the-forrest-firm/). On the other hand, making any sort of legal decisions based on template documents without consulting an attorney can lead to significant problems down the road. We believe very strongly that a knowledgeable corporate lawyer can be immensely more valuable to your business than any do it yourself service. At some level, LegalZoom (or services like it) are in fact cheaper, however, most consumers know that in almost any industry – the race to the bottom in terms of cost is not always the best answer. A significant portion of the decision on legal spend is not only costs, but also quality – and certainly, balancing the two appropriately.
I found a good piece written by one of my colleagues in the legal profession, Alec Segarich, an attorney based in San Francisco. 10 Reasons Why Your Own Lawyer Is Better Than LegalZoom for Business Formation weighs up quite well the pros and cons of hiring an attorney versus using a LegalZoom-styled service. Mr. Segarich outlines several of the unseen, at least at first glance, limitations and pitfalls of doing it yourself with regard to corporate formation. He addresses issues such as lack of speed, completeness, thoroughness, flexibility, and specificity to the forms and processes available by state at do-it-yourself legal services retailers, as well as the lack of the hallmark of the attorney/client relationship—the knowledge, advice, and expertise imparted to the business owner by a trusted advisor that knows the owner and their business. For those of you contemplating issues related to starting a business, I encourage you to read the Segarich article for yourself.